For Investors

A Rocky Start to a New, Uncertain Era at Toll Group

Investors in the Toll Group face uncertainty on several fronts with a weak global economy, a questionable corporate expansion strategy, and a new CEO. Indeed, the Australian Financial Review noted that Mr. Brian Kruger will soon have to decide if he will continue former CEO’s Paul Little’s tough stance on U.S. union activity or move to settle this escalating dispute. AFR‘s conclusion:

Toll acknowledges that the union’s campaign could damage the brands of some of its customers for working with the logistics group. It will be in Kruger’s interest to resolve the dispute as soon as possible.

In this challenging environment, investors and shareholders may benefit from the unique perspective and up-to-date information that Toll’s frontline workers can provide.

Report: Low-Road Labor Practices Jeopardize U.S. Growth

A recent report makes the case that controversial labor practices by Toll’s U.S. managers could jeopardize the company’s growth in the North American market. Toll Group: Management Missteps Threaten U.S. Operations & Expansion explains how the mistreatment and abuse of workers at its U.S. operations represents a disturbing departure from the successful, cooperative model the company employs in Australia.

As a recent entrant to the U.S. market, Toll is still establishing ties to its North American customers. The report’s argument – that worker mistreatment generates negative publicity – is already proving true, and could imperil these new relationships and invite risks to the supply chain of Toll’s customers.

The U.S. management problem may also reflect a deeper problem associated with Toll’s pace of acquisitions; namely that the company is losing control of its acquired companies, tolerating inferior operational standards, and allowing easily-resolvable issues to escalate.

The report suggests investors engage Toll’s corporate leadership about the U.S. problems and urge a swift resolution that aligns the management strategies in America with the successful values of its Australian operations.